Big Idea:

Rwanda is set to obtain a portion of carbon credits instead of a portion of profits derived from Article 6 of the Paris Agreement. These credits will be applied to offset the country's National Determined Contributions (NDC) climate commitments. This initiative will contribute to advancing the industry, enabling Rwanda to diminish its climate footprint by facilitating access to cleaner technology through reduced emissions.

Why It Matters:

Rwanda’s decision to prioritize carbon credits over short-term gains sets an example for other nations. Emphasizing the importance of transparency and quality in its carbon market framework, Rwanda ensures that purchased credits meet international standards. The country  aims to offer high-quality carbon credits that provide climate benefits, empower communities, and protect biodiversity, underlining integrity in the voluntary market.

Key Details:

• This strategy could stabilize Rwanda's GDP, heavily reliant on climate-sensitive sectors, and bolster its ambition of carbon-neutral by 2050.
• Carbon pricing mechanisms cover a quarter of GHG emissions, generating $95 billion revenue from carbon taxes and Emissions Trading Systems (ETS) according to the World Bank.
• Rwanda plans to reduce GHGs by 38% by 2030.

Dive Deeper:

Rwanda's ambitious Green Growth and Climate Resilience Strategy requires an estimated $11 billion investment, a significant challenge considering the current inflows of aid and investment.